In contrast to the expectations that Bitcoin could hit the $110,000 mark, the biggest cryptocurrency experienced a significant drop in a single day.
Bitcoin Pulls Back from Record High
According to CoinMarketCap, Bitcoin experienced its first drop in four days as speculative bets across financial markets eased after cautious remarks from Federal Reserve officials about the pace of reducing borrowing costs. The cryptocurrency fell by as much as 5.3% to $100,680, after reaching an all-time high of $108,000 earlier in the week.
“The global market is adjusting to a less dovish Fed outlook for 2025,” said Zaheer Ebtikar, founder of crypto fund Split Capital. This has prompted crypto traders and market makers to reduce their risk exposure.
On Wednesday, the Fed lowered its benchmark interest rate for the third consecutive time but signaled fewer cuts in 2025 than previously expected. While lower rates typically boost demand for riskier assets like cryptocurrencies, the forecast has temporarily weighed on prices.
David Lawant, head of research at crypto prime broker Falcon X, noted that Bitcoin’s weaker correlation with major stock indexes could limit the long-term impact of these macroeconomic factors.
“Although slower rate cuts are pressuring risk assets now, industry-specific developments and anticipated policy shifts under the incoming administration are likely to drive the market in the months ahead”, Lawant Said.
Also Read: Bitwise CIO Eyes Bitcoin Price Surge to $500,000 After US Strategic Reserve Launch
